Novelion's Aegerion resolves U.S. drug probes for $40 million

BOSTON (Reuters) - Aegerion Pharmaceuticals Inc will plead guilty to two misdemeanors and pay $40.1 million to resolve investigations into its marketing and sales of an expensive cholesterol drug, U.S. authorities said on Friday.

The settlements will resolve long-running investigations into Aegerion, a subsidiary of Canada’s Novelion Therapeutics Inc, by the U.S. Justice Department and the U.S. Securities and Exchange Commission related to its drug Juxtapid.

Under the agreements, Aegerion will plead guilty to two misdemeanor drug misbranding violations of the Food, Drug and Cosmetic Act, pay $36 million to resolve cases by the Justice Department and pay $4.1 million to settle the SEC’s lawsuit.

It also entered into a deferred prosecution agreement to resolve a charge that it conspired to violate the Health Insurance Portability and Accountability Act.

The settlements finalized agreements Aegerion disclosed in May 2016. The Cambridge, Massachusetts-based company in November merged with QLT Inc and became a subsidiary of the newly named Novelion.

“We are eager to get the problems that occurred with Aegerion under prior leadership behind us, and we believe these agreements are in the best interest of shareholders,” Aegerion said in a statement.

Prosecutors said after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating a rare genetic condition that causes high cholesterol, Aegerion promoted it for patients who had not been diagnosed with the condition.

Juxtapid, which cost $250,000 to $300,000 annually per patient, featured a black box warning on its label that it could cause serious liver and stomach problems, prosecutors said.

Sales representatives also were trained to tell doctors and patients that Juxtapid would “take patients out of harm’s way” and prevent “impending” heart attacks and strokes, despite the lack of data supporting those claims, prosecutors alleged.

The Justice Department said Aegerion’s promotion of Juxtapid for patients without the genetic condition also led to false claims for payment to be submitted to government health care programs including Medicare.

“Aegerion put profits over patient safety and enriched itself at taxpayer expense,” Acting U.S. Attorney William Weinreb in Boston said in a statement.

The SEC alleged Aegerion also misled investors by exaggerating how many new patients filled prescriptions for Juxtapid.

The Justice Department said three ex-Aegerion employees who brought a whistleblower lawsuit against the company will receive $4.7 million as part of its civil settlement.